Stocks should tack on more summer gains after today's jobs report: trader

The US economy added 209,000 jobs—far greater than the 180,000 analysts had been expecting. June’s numbers from the BLS were also revised higher to 231,000 from 222,000. The unemployment rate dropped from 4.4% to 4.3%, in line with analysts’ expectations. The closely-watched labor force participation rate rose slightly from 62.8% to 62.9%. Those out of the work force declined by 156,000 to 94.657 million.

Overall, it’s a great jobs report, but traders are keeping an eye on the part-time hires. Last month, 393,000 part-timers were added—the biggest part-time hiring since September 2016. Today’s report will keep the Trump Train on track for the rest of the summer.

The Dow (^DJI, DIA) is trading above 22,000 and is just coming off seven all-time record closes in a row, bringing the total record closes for the year to 33. Expect to see traders holding back and waiting until next week to get fully involved in the jobs rally.

Traders will be scanning the weekend papers to see if Federal Reserve officials comment on the report. As of now, I expect to see a September move to start unwinding its $4.8 trillion bond portfolio, starting with $10 billion per month. The December meeting is still a long way off, but today’s numbers should keep the Fed on track to raise rates by another quarter point.

The earnings reports today are pretty light—and will be totally over-shadowed by the jobs and related numbers out of Washington. Next week we get back to earnings, where this surprisingly strong quarter looks to continue with about 85 companies reporting. So far about 74% of companies that have reported beat on earnings, with 70% beating on revenue.